Tag Archive: economics
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Demand for Mud Burgers is up
Keeping bellies full in Haiti
In Haiti, where three-quarters of the population earns less than $2 a day and one in five children is chronically malnourished, the one business booming amid all the gloom is the selling of patties made of mud, oil and sugar, typically consumed only by the most destitute.
“It’s salty and it has butter and you don’t know you’re eating dirt,” said Olwich Louis Jeune, 24, who has taken to eating them more often in recent months. “It makes your stomach quiet down.”
More Oil Won’t Help
It’s not a question of flow but bandwidth
FT: Saudis warn on oil capacity
In unusually frank remarks, Ali Naimi, the kingdom’s oil minister, said: “Limited capacity along the entire supply chain is the real source of current global supply tightness and represents the greatest threat to ensuring adequate energy to fuel future economic growth.”
In other words, no matter how much oil we take out of the ground, if it cannot be processed then it won’t help meet rising demand. Prices are being driven by the bottleneck in production.
Together with the IEA, Mr Naimi and other Opec ministers have long argued that the need is for more investment in refineries, most of which are located within oil consuming countries. He said to overcome the current bottleneck “we must create an environment that encourages investment in energy infrastructure along the entire value chain’’.
No Ethics in Ethanol
Biofuel hell
The path to hell is paved with good intentions
Consider that 20 percent of the U.S. corn crop was converted to 5 billion gallons of ethanol last year. This replaced only 1 percent of U.S. petroleum. If the entire U.S. corn crop were used, it would replace a mere 7 percent.
The energy expended to produce a gallon of corn ethanol is 40 percent greater than what is in ethanol itself.
Corn-based ethanol production receives $6 billion in subsidies.
Each gallon of ethanol requires 1700 gallons of waters and releases 12 gallons of noxious sewage effluent into the environment (farmers use ~150 lb. of nitrogen fertizlizer to raise 8700 lb. of corn/acre).
Biofuels is an interesting idea that has become a nightmare in practice. It was fun when a few farmers were powering their trucks on the waste of french fry oil. But the idea has surpassed its feasible limits.
Nice try, but time to drop it.
Spotting the Bubble
How low can you go?
How low can you go?
How a Bubble Stayed Under the Radar
Were all these people stupid? It can’t be. We have to consider the possibility that perfectly rational people can get caught up in a bubble. In this connection, it is helpful to refer to an important bit of economic theory about herd behavior.
